EV Insurance Costs UK

As an FCA-authorised motor insurance brokerage that has helped arrange over 800,000 policies, WeCovr provides expert insights into the UK vehicle insurance market. This guide tackles one of the most pressing topics for modern drivers: the soaring cost of electric car insurance and how you can take control.

Why Your Electric Car Insurance is Soaring in the UK and How Savvy Drivers Can Cut Costs in 2024

The electric vehicle revolution is well underway. According to the latest DVLA data, over one million fully electric cars are now on UK roads, a testament to their growing appeal. Yet, as many new owners are discovering, the cost of insuring an EV can come as a significant shock. While you save on fuel and road tax, your motor policy can be substantially higher than for a comparable petrol or diesel car.

This isn't just a feeling; it's a fact backed by industry data. The Association of British Insurers (ABI) has consistently reported that the average premium for EVs is higher. But why? And more importantly, what can you do about it?

This comprehensive guide will demystify the world of EV insurance. We’ll explore the key reasons behind the high costs, explain your legal obligations, and provide a wealth of practical, actionable tips to help you find the best car insurance provider and secure a cheaper premium in 2024 and beyond.

The Core Reasons for High EV Insurance Premiums

Insurers calculate premiums based on risk – the likelihood of a claim and the potential cost of that claim. For electric vehicles, several factors combine to push this risk profile, and therefore the price, upwards.

1. The High Cost of Repairs

This is the single biggest driver of expensive EV insurance. If you have an accident, repairing an electric car is often far more complex and costly than fixing a traditional internal combustion engine (ICE) vehicle.

• Specialist Parts: EV-specific components like battery packs, electric motors, and sophisticated onboard electronics are expensive to produce and replace. The battery alone can account for up to 40% of the vehicle's total value.
• Battery Damage is Critical: Even a minor collision that impacts the undercarriage can damage the high-voltage battery. Due to the risk of thermal runaway (a dangerous and hard-to-extinguish fire), a damaged battery often cannot be repaired. Insurers will frequently have to write off the entire vehicle, even if the cosmetic damage seems minimal. This leads to a much higher total loss claim cost.
• Lack of Aftermarket Parts: The market for second-hand or non-manufacturer EV parts is still immature. This means insurers are often forced to use expensive Original Equipment Manufacturer (OEM) parts for repairs, driving up the bill.

2. Specialist Labour and Longer Repair Times

You can't take a damaged EV to just any local garage.

• Qualified Technicians: Repairing high-voltage systems requires technicians with specialist training and qualifications (such as the IMI TechSafe™ standard). There is currently a shortage of these qualified mechanics in the UK, creating a bottleneck.
• Specialist Equipment: Garages need dedicated bays, insulated tools, and diagnostic equipment to work safely on EVs. This investment is significant, meaning fewer repair centres are equipped to handle them.
• Longer Repair Cycles: A combination of parts scarcity and a shortage of qualified technicians means EV repairs take longer. The ABI notes that repair times for EVs can be over 25% longer than for their petrol equivalents. This extended time means the insurer has to pay for a courtesy car for longer, adding to the overall claim cost.

3. Higher Purchase Price and Insurance Groups

Insurers use a grouping system, from 1 (cheapest) to 50 (most expensive), to categorise cars for premium calculations. EVs often fall into higher insurance groups.

• Value: EVs generally have a higher list price than comparable ICE models. A more valuable car costs more to replace if stolen or written off.
• Performance: Many EVs, even standard family models, boast rapid acceleration and instant torque. Insurers see this high performance as a potential risk factor for accidents, especially for drivers unaccustomed to it.

A good example is the Volkswagen Golf. A standard petrol model might sit in insurance group 15, while its electric equivalent, the ID.3, often starts in group 25 or higher.

4. Data and Uncertainty

While EVs have been around for over a decade, they are still relatively new in the grand scheme of mass-market motoring. Insurers thrive on historical data to predict future losses.

• Limited Long-Term Data: Insurers have over a century of data for petrol cars but a much smaller pool for EVs. This uncertainty about long-term reliability, battery degradation, and real-world accident repair costs can lead them to price their policies more cautiously (i.e., more expensively).

Table: EV vs Petrol Car - A Typical Cost Breakdown Example

Your Legal Motor Insurance Obligations in the UK

Before diving into cost-saving, it's crucial to understand the law. In the UK, the Road Traffic Act 1988 mandates that all vehicles used on public roads must have at least Third-Party Only motor insurance. Driving without valid insurance is a serious offence, leading to fines, penalty points, and even disqualification.

Let's break down the main types of cover.

Levels of Car Insurance Cover Explained

Important Note: Counterintuitively, Comprehensive cover is often cheaper than Third-Party options. This is because insurers' data shows that drivers who opt for lower levels of cover are statistically a higher risk. Always get quotes for all three levels.

Business and Fleet Insurance

If you use your vehicle for work (beyond commuting), you need business car insurance. For companies operating multiple vehicles, fleet insurance is the solution. WeCovr specialises in helping businesses find tailored motor policies, ensuring they meet their legal obligations and manage the unique risks of commercial EV fleets, such as public liability for charging cables and downtime management.

Demystifying Your Insurance Policy Jargon

Understanding your policy document is key to making savvy decisions. Here are the core concepts explained in plain English.

• Premium: The amount you pay for your insurance policy, either as a lump sum annually or in monthly instalments (which usually costs more due to interest).
• Excess: This is the amount you must contribute towards any claim you make. It's split into two parts:
  • Compulsory Excess: A fixed amount set by the insurer.
  • Voluntary Excess: An amount you agree to pay on top of the compulsory excess. A higher voluntary excess shows the insurer you are willing to take on more risk, which can lower your premium.
• No-Claims Bonus (NCB) / No-Claims Discount (NCD): A valuable discount you earn for each year you drive without making a claim. It can reduce your premium by up to 70% or more after five or more claim-free years. Making a claim will usually reduce your NCB by two years unless you have paid to protect it.
• Optional Extras: These are add-ons you can buy to enhance your cover. For EVs, some are particularly relevant:
  • Breakdown Cover: Ensure it includes EV-specific assistance, like running out of charge or recovery to a specialist garage.
  • Legal Expenses Cover: Covers legal costs if you need to pursue a claim for uninsured losses (like your excess or loss of earnings) against a third party.
  • Courtesy Car: Crucial for EV owners given the long repair times. Check the policy wording – does it guarantee an electric courtesy car, or will you get a small petrol hatchback?

20 Actionable Tips: How Savvy Drivers Can Cut EV Insurance Costs

Now for the practical advice. High premiums are not inevitable. By being a smart consumer and a safer driver, you can significantly reduce your motor insurance UK costs.

Shopping for Your Policy

1. Compare the Market Exhaustively: This is the golden rule. Never accept your renewal quote without shopping around. Prices for the same driver and car can vary by hundreds of pounds between insurers. Using an independent, FCA-authorised broker like WeCovr gives you access to a wide panel of standard and specialist insurers at no cost, saving you time and money.

2. Choose an EV in a Lower Insurance Group: Before you buy, check the car's insurance group. A Renault Zoe (group 18-22) will be far cheaper to insure than a Tesla Model 3 Performance (group 50). Think about your actual needs versus high-performance wants.

3. Look for Insurers with EV-Specific Policies: A growing number of insurers are now offering dedicated EV policies. These are designed with EV risks in mind and can include vital cover for batteries, charging cables, and liability for your home charging point. They often have a better understanding of the vehicle, which can lead to fairer pricing.

4. Pay Annually, Not Monthly: Paying your premium in monthly instalments is essentially a loan from the insurer, and they will charge you interest. Paying annually in one lump sum can save you 10-20%.

5. Don't Over-Insure on Optional Extras: Review the add-ons. Do you already have breakdown cover with your bank account? Is the legal cover worth the extra £30? Trim the fat from your policy to reduce the base cost.

Adjusting Your Policy Details

6. Increase Your Voluntary Excess: If you are a safe driver and can afford to pay a bit more in the event of a claim, increasing your voluntary excess from, say, £250 to £500 can lead to a noticeable drop in your premium.

7. Be Accurate With Your Mileage: Don't just guess your annual mileage. Check your last two MOT certificates to see how much you actually drive. Overestimating your mileage means you're paying for risk you don't represent. Be honest, though, as understating it could invalidate a claim.

8. Add an Experienced Named Driver: Adding a second driver with a long, clean driving history (like a parent or partner) to your policy can sometimes reduce the premium, as it implies the car will be used less by the main (potentially higher-risk) driver.

9. Check Your Job Title: How you describe your occupation can have a surprising impact. A "Chef" might pay more than a "Caterer," and a "Journalist" more than a "Writer." Use an online job title tool to see what legitimate variations exist for your role, but never misrepresent what you do.

10. Review Your "Use" Class: Do you just use your car for social purposes and commuting to a single place of work? Then you need "Social, Domestic, Pleasure & Commuting." If you use it to travel between multiple work sites, you need "Business Class 1." Ensure you have the right cover, but don't pay for business use if you don't need it.

Enhancing Your Driving and Security

11. Build and Protect Your No-Claims Bonus (NCB): Your NCB is your most powerful money-saving tool. Drive safely to keep it intact. Once you have four or more years, consider paying a small extra fee to protect it. This allows you to make one or two claims within a set period without losing your discount.

12. Install a Thatcham-Approved Security Device: While most new EVs have excellent built-in security, adding an approved tracker can provide extra peace of mind and may earn you a discount from some insurers, especially for high-value models.

13. Consider a Telematics (Black Box) Policy: Telematics insurance isn't just for young drivers anymore. It's perfect for proving you are a safe EV driver. A device or smartphone app monitors your speed, acceleration, braking, and cornering. Good driving is rewarded with lower premiums, directly countering the insurer's assumption that all EV drivers are boy-racers.

14. Take an Advanced Driving Course: Completing a course with an organisation like IAM RoadSmart or the Royal Society for the Prevention of Accidents (RoSPA) demonstrates that you are a skilled, safety-conscious driver. Many insurers offer a discount to drivers who hold these qualifications.

15. Park Securely: Where you park your car overnight matters. A locked garage or a secure private driveway is seen as much lower risk than parking on the street, and your premium will reflect that.

For Fleet and Business Owners

16. Implement a Fleet Risk Management Programme: For businesses running EV fleets, proactive risk management is essential. This includes specialist driver training on EV characteristics (e.g., regenerative braking, judging range), regular vehicle checks, and clear policies on safe charging.

17. Use Fleet Telematics: Telematics data is invaluable for fleet managers. It helps identify high-risk driving behaviour that can be addressed with training, reduces energy consumption, and provides concrete data to negotiate better fleet insurance premiums.

18. Don't Mix Personal and Business Use Without a Proper Policy: If your employees use company EVs for personal journeys, ensure your policy covers this. A specialist broker can ensure your cover is comprehensive.

19. Choose the Right Vehicles for the Job: Don't just electrify your fleet with the most expensive, high-performance models. Choose EVs that are fit for purpose and fall into sensible insurance groups to manage the total cost of ownership.

20. Partner with a Specialist Broker: Managing an EV fleet's insurance is complex. A broker like WeCovr has access to specialist fleet insurers and the expertise to help you structure a policy that covers your unique risks while controlling costs. High customer satisfaction ratings show we deliver on our promises. Plus, clients who purchase motor or life insurance through WeCovr can often access discounts on other insurance products.

The Future of EV Insurance

The news isn't all bad. As more EVs hit the road, the situation is set to improve.

• Growing Repair Network: More technicians are being trained, and more garages are investing in the equipment to repair EVs. This will increase competition and reduce repair times.
• Maturing Parts Market: An aftermarket for recycled and non-OEM parts will develop, providing cheaper repair options.
• More Data: As insurers gather more data, they will be able to price risk much more accurately, meaning safe EV drivers will no longer have to subsidise the unknown.

In the meantime, taking the proactive steps outlined in this guide is the best strategy for any EV driver or fleet manager looking to secure the best possible motor policy.

Frequently Asked Questions (FAQs)

Ready to put these tips into action and find a fairer price for your electric vehicle cover?

Whether you're a private car owner, a business director, or a fleet manager, the team at WeCovr is here to help. As an FCA-authorised broker, we do the hard work for you, comparing policies from a wide range of leading UK insurers to find you the right cover at the right price.

[Get Your Free, No-Obligation EV Insurance Quote from WeCovr Today]